Beijing High Court issues a Guidance for trial of cases involving trademark rights

Recently, the Beijing High Court issued a Guidance for Trial of Administrative Cases Involving Granting and Ownership Determination of Trademark Rights (“Guidance”). The Guidance refers to decisions made by the PRC Trademark Review and Adjudication Board (“TRAB”) relating to opposition, cancellation and invalidation requests. The major content of the Guidance is follows:

1. Recognition and protection of well-known trademarks

(a) Time limit for evidence produced

The Regulations on Recognition and Protection of Well-known Trademarks issued by the State Administration for Industry and Commerce (“SAIC”) stipulate that evidence for recognition of well-known trademarks may include relevant materials for the main goods on which the trademark was used during the past three years.

In the past, evidence which was produced after the application date of the disputed trademark (“Disputed Trademark”) was not likely to be adopted by the court. However, according to the Guidance such evidence can still be accepted, if the applicant shows that the evidence, which was produced after the application date of the Disputed Trademark, can actually prove that the applicant’s trademark (“Cited Trademark”) had already reached the well-known status before the application date of the Disputed Trademark. Consequently, the evidence scope for recognition of well-known trademarks is enlarged.

(b) Order of relevance of the conditions for invoking the protection as well-known trademark

To pursue the protection as well-known trademark, the applicant shall prove that the conditions specified in Article 13 of the PRC Trademark Law are met. These conditions include whether the Cited Trademark is a well-known trademark, whether the Disputed Trademark constitutes a reproduction of the well-known Cited Trademark and the likelihood of confusion etc. (“Conditions”).

The current laws and regulations do not specify the order of relevance of the above Conditions. The Guidance clarifies that the court shall first determine whether the applicant’s Cited Trademark has reached the well-known status. If the evidence submitted by the applicant is not sufficient to prove this Condition, it is not necessary to examine whether the other Conditions are met. After the well-known status is ascertained, the court shall then examine whether the evidence submitted by the applicant satisfies the other Conditions.

2. Clarification of stable market status

(a) According to the Opinions on Several Issues Concerning the Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights issued by the PRC Supreme People’s Court, the courts shall maintain the stable market status that has already been formed when determining the granting and ownership determination of trademark rights.

(b) In recent years, more and more defendants in opposition and cancellation cases cited the above provision and argued that the Disputed Trademark has achieved a stable market status after being used, and, thus, it can be distinguished from the applicant’s Cited Trademark. The Guidance clarifies that to support the above claim, the defendants needs to prove:

(1) the reputation of the Disputed Trademark through use prior to the application date of the applicant’s Cited Trademark; and

(2) that the relevant public can distinguish the Disputed Trademark from the Cited Trademark.

To prove the above conditions, the Guidance specifies that a market survey report may be accepted as evidence. The market survey shall use similar circumstances in which consumers purchase the products and shall ascertain the quantity and scope of the relevant public. Further the market survey shall describe the degree of attention paid by the relevant public to their purchases, as well as the methods of research such as overall comparison, isolation for observation, and comparison among main parts. Any market survey report which does not contain the aforementioned factors or uses them in a wrong way, or if the authenticity of such report cannot be verified, cannot be used.

In the past, market surveys were seldom accepted as evidence, because they were considered unilateral submissions by the relevant party. Under the Guidance, this can now change.

The Guidance addresses some important issues which in the current judicial practice are controversial. The Beijing High Court is only a lower level court. Legally speaking, the Guidance issued by lower level courts is not binding on other PRC courts or authorities. Nevertheless it is possible that other courts and the TRAB will take into consideration this Guidance when passing decisions and judgments in the future.